Shulou(Shulou.com)11/24 Report--

According to news on January 16, recently, artificial intelligence startup OpenAI has developed a chat robot ChatGPT that has become popular among investors, and Microsoft is preparing to invest an additional $10 billion (currently about 67.1 billion yuan) in OpenAI. But the problem now is that it is not clear what products the technology can develop or whether it will be profitable.

When people asked the chatbot ChatGPT how much OpenAI behind it was worth, the recently popular robot said: "it's probably worth hundreds of millions of dollars."

It is reported that Microsoft is considering investing $10 billion in OpenAI on top of its previous investment of $1 billion. Although ChatGPT and other artificial intelligence models developed by OpenAI are not yet profitable, Microsoft is betting on OpenAI that the value is much higher than ChatGPT claims. OpenAI has developed a number of impressive demonstration models and let Microsoft's GitHub platform provide a popular automatic code completion feature for programmers. Despite the hype around OpenAI's generative artificial intelligence technology, the startup has not created many groundbreaking, high-margin products or businesses.

"We really don't know what ChatGPT is good at," said James Cham, a partner at investment firm Bloomberg Beta. The profitability of ChatGPT may not be clear, but Cham, like many venture capitalists and entrepreneurs, believes that the technology behind artificial intelligence robots will pay off hugely. Nowadays, there is a surge of interest in generative artificial intelligence that can automatically generate text, images and other data, and the technology of OpenAI has become the focus of this field.

Cham likens the current situation to the early stages of the Internet, when vague but sobering demonstrations heralded earth-shaking changes in the way software, technology companies and society at large operate. "We have had an excellent demonstration of artificial intelligence for decades, but this is the first time it has been made public, and they are very excited about the possibility of artificial intelligence," Cham said of ChatGPT.

After OpenAI launched the chat robot in December 2022, it caused a storm on the Internet. In addition to ChatGPT's incredible ability to answer questions, ChatGPT can write well-organized articles, write runnable computer code, and think about the meaning of life. ChatGPT is based on GPT-3, a text generation algorithm developed by OpenAI, which can get large amounts of text from the Internet and other sources, and then do more training on how to answer questions.

One reason the tech industry is so excited about ChatGPT is that it could break the long-standing dominance of Google and other tech giants in search, allowing smaller companies to beat much larger competitors. A popular saying is that robots may change web search.

For Microsoft, increasing its investment in OpenAI will ensure that once artificial intelligence starts to upend the status quo, Microsoft will not only remain unscathed, but also benefit from it. Nathan Benaich, an investor at Air Street Capital, who tracks trends in the artificial intelligence industry, said that despite the hype surrounding generative artificial intelligence, Microsoft could use the technology to improve its products.

Microsoft has a wide range of products in enterprise, cloud services, and consumer devices and software, providing potential opportunities to take advantage of generative artificial intelligence. Microsoft has used ChatGPT technology to automatically generate code snippets in Visual Studio products, and it is reported that Microsoft is considering using ChatGPT to improve the performance of search engine Bing.

"Microsoft provides so much application space for all its customers," Bernarch said. " For a company like Microsoft worth about $1.7 trillion, $10 billion is not a lot of money if potential returns are taken into account, he said. There are reports that the investment will value OpenAI at $29 billion.

David Yoffie, a professor at Harvard Business School Business School who studies strategies for large technology platforms, says Microsoft may also see OpenAI as a way to catch up with other companies. Microsoft has lagged behind Google and other companies in cutting-edge research on artificial intelligence, he said. "more needs to be done, which is why investment is needed," Mr. Yoffie said. "their investment may accelerate the commercialization of OpenAI."

In 2019, Microsoft invested $1 billion in OpenAI. The deal bundles OpenAI with Microsoft's cloud computing platform. Developing artificial intelligence tools like ChatGPT requires a lot of math and training data, so supporting OpenAI is consistent with Microsoft's goal of taking a larger share of the cloud computing market. The cutting-edge requirements of OpenAI can help Microsoft develop more powerful cloud computing technologies to stand out from the cloud computing industry. In 2021, Amazon accounted for 40% of the cloud services market, Microsoft had a market share of 15%, and Google, widely regarded as a leader in artificial intelligence, accounted for only 6%.

Amber Yang, an investor who specialises in artificial intelligence companies, says that while many large technology companies tend to worry about the negative impact if artificial intelligence models perform poorly, OpenAI has more freedom to test generative artificial intelligence. "they act, behave and think more like a startup, while Google is more constrained by the pursuit of perfection," she says. " Yang believes that Microsoft can benefit from it. The close relationship with OpenAI allows Microsoft to make effective use of the adventures of artificial intelligence at the right distance.

The exact terms on which Microsoft will invest $10 billion in OpenAI are unclear, but there are reports that Microsoft will earn 75 per cent of OpenAI's profit before the investment is recovered. Microsoft will then retain 49 per cent of OpenAI, another 49 per cent by other investors and 2 per cent by non-profits to which OpenAI belongs. Earlier reports showed that several investment companies were also looking at OpenAI shares.

It may not be a coincidence that ChatGPT is in the spotlight and OpenAI is raising money at a time when there is a lot of hype around generative artificial intelligence in the industry. Before that, many people had not tried to develop products using this technology.

"OpenAI is very good at marketing and making presentation software," says startup Cohere. Said Mike Volpi, an investor in ai. Cohere. Ai competes with OpenAI in terms of language model. Compared with some other investors, Volpi is sceptical about the development of generative artificial intelligence and says the commercial potential of the technology has yet to be determined. According to Volpi, one open question is how unique the models developed by OpenAI or other companies are, and another is whether the industry can solve the problem of making the models behave consistently. "you have to strike a delicate balance between what it can do now and what people want it to do," Volpi said. "

Some experienced technology entrepreneurs are also cautious. Phil Libin, chief executive of Evernote, a popular note-taking app from 2007 to 2015, says he is a big fan of artificial intelligence but is cautious about the current craze. "there is still a lot of work to be done for these artificial intelligence models to really live up to what people think they are promised," he said. "

Libin also believes that there are many thorny technical challenges for these artificial intelligence in the future. One of them is that ChatGPT and other generative artificial intelligence models currently grab human-generated content from the web, and the generated text and images are put online. "all these models will mess up their training data," he said. "We are about to be inundated by a tsunami of information about nonsense."

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